Work out exactly how big a gain you need to climb back from a loss. A 20% drawdown takes a 25% gain to recover — and the deeper the hole, the steeper the climb. See why protecting capital matters.
Losses and gains are not symmetrical. When you lose money, you're left with a smaller balance — and that smaller balance has to grow by a larger percentage to get back to where it started.
Lose 10% and you need 11% to recover. Lose 25% and you need 33%. Lose 50% and you need a 100% gain — you have to double what's left. By the time you're down 90%, you need a 900% gain just to break even. This asymmetry is the single biggest reason disciplined traders obsess over not taking large losses in the first place.
Recovery gain % = Loss % ÷ (100 − Loss %) × 100
The practical lesson: it's far easier to avoid a deep drawdown than to trade your way out of one. Keep risk per trade small with a lot size calculator, use stop losses, and never try to win it all back in one trade.